Get comfortable with how KiwiSaver works! Take a look at our answers to common questions.
Why would I join a KiwiSaver Scheme?
A KiwiSaver account can help you to grow your savings for two main reasons: to buy your first home and to help you have enough money for your retirement.
KiwiSaver can be tailored to help you meet your wealth goals and it's easy to make changes throughout your savings journey.
When can I access my KiwiSaver money?
KiwiSaver was created for investing over the long-term, to help people save for retirement. That's why you have to meet certain conditions to withdraw from your KiwiSaver funds.
You can generally access your KiwiSaver savings:
- When you buy or build your first home.
- Once you reach 65, however, you can continue with your KiwiSaver account investments throughout retirement.
You may be able to access your KiwiSaver before you retire:
- If you suffer, or are likely to suffer, significant financial hardship, you can apply to withdraw some of your KiwiSaver savings.
- If you move overseas.
- For health reasons
- For other reasons, for example, bankruptcy, amongst others.
Withdrawal criteria set by the Government must be met.
You can learn more about making early withdrawals from your KiwiSaver funds on the Inland Revenue website.
Is KiwiSaver a savings account?
KiwiSaver should generally be thought of as a long-term investment vehicle. To be clear, KiwiSaver is not like a savings account where you can make withdrawals whenever you want. You can only access your KiwiSaver account money when you are buying your first home or when you turn 65 years of age.
The other main difference between a savings account and KiwiSaver is that your KiwiSaver account balance can go up and down with short-term movements in investment markets, while a savings account doesn't fall in value unless you make a withdrawal.
What KiwiSaver option is right for me?
Aurora Capital has 8 different KiwiSaver Scheme options to choose from. Whether you have just started working or already retired, we have KiwiSaver investment options that can suit everyone. The main difference between the options is the amount of risk that you are prepared to take for a potentially higher return, and how much time you have before you plan to access your money.
Want to learn more about our options?
How do contributions work?
Contributions are a deposit of money into your KiwiSaver account. Contributions are invested in investment markets to earn you a rate of return, so that your money grows over time.
You, your employer and the Government can all make contributions to your KiwiSaver account.
If you are an employee, you can choose to regularly contribute 3%, 4%, 6%, 8% or 10% from your before-tax pay. You can also make contributions if you aren't working or are self-employed.
It's easy to make changes to your KiwiSaver contribution rate throughout your savings journey. So, if your personal circumstances and goals change, so can your contributions.
How much is the minimum contribution?
If you're an employee, the minimum amount you can contribute is 3% of your salary.
We think 3% is a good start, and if that's you - well, nice work for getting the ball rolling! Your employer will be required to contribute another 3%, too.
But did you know that a modest increase to 4% could add thousands of extra dollars to your KiwiSaver savings by the time you reach 65 years of age? Our KiwiSaver Calculator shows how your balance can change under different contribution rates, risk, and timeframes.
Why would I contribute more than the minimum?
The regular contributions that you make throughout your life are an investment in your future and can have a huge impact on whether you have enough money to meet your retirement goals.
Want to figure out how much you want to contribute? Here are four things you can do:
- Use the Sorted KiwiSaver Calculator to see how increasing your contribution, for example, to 10% of your wage or salary, can make a big difference to your wealth by the time you retire.
- Review your income and expenses, as well as your future wealth and retirement goals. Calculate whether you can contribute more than the 3% minimum.
- Consider making a one-off lump sum contribution if you receive a bonus or inheritance.
- Talk to one of our expert advisers.
What is a savings suspension?
If you have been a KiwiSaver member for at least 12 months and have been making regular contributions, you can apply for a temporary break from paying contributions. This is called a 'savings suspension'. During a savings suspension, your employer will typically also stop paying contributions into your KiwiSaver account account.
Contributions can be suspended for 3 to 12 months.
You can visit the IRD website and log into myIR to download a savings suspension (contribution suspension) request form.
If you suffer, or are likely to suffer, significant financial hardship, you may be able to apply for a savings suspension, even if you have been a KiwiSaver member for less than 12 months. You may also be able to withdraw some of your KiwiSaver savings.
How do fees work in the Aurora KiwiSaver Scheme?
We're not the cheapest but we believe we are fair and transparent.
Our fees include an admin fee, the active management of the investment options, and the ongoing advice you get that’s built into our service. That means every Aurora KiwiSaver Scheme member can access our expert financial advice. With good advice, you will be guided into the strategy that is right for your age and stage. We believe that being invested in the wrong strategy for your age and stage is a risk that can cost you when it is time for you to retire.
How do I withdraw my money after I turn 65?
The great news is that after you turn 65 years of age, you can start to make withdrawals from your KiwiSaver savings. You have a lot of flexibility on how you choose to do this. You can withdraw:
- all of it as a lump sum
- as regular withdrawals
To start making withdrawals, you simply need to complete a withdrawal form from your KiwiSaver provider, plus a statutory declaration.
If you joined KiwiSaver before 1 July 2019 and were aged between 60-64 you previously would have been locked into KiwiSaver for 5 years. But changes to the rules mean that once you turn 65, you can choose to opt out and withdraw your savings, or you can keep your money in KiwiSaver for the full 5-year term. If you choose to opt out, you will stop receiving contributions from your employer and the government.
Can I stay invested in KiwiSaver after I turn 65?
Yes! KiwiSaver gives you a lot of flexibility. You can continue to make contributions to your KiwiSaver savings after you turn 65, or you can stop making contributions. You can make a full withdrawal all of your KiwiSaver funds, or you can make withdrawals when you need the money.
If you are still working, you will stop receiving contributions from your employer and the government once you turn 65.
We encourage you to speak with an expert adviser to make sure that you're getting the most out of your KiwiSaver and are invested in the right fund type for your age and needs.
What is my PIR?
A Prescribed Investor Rate (PIR) is the rate used to calculate how much tax you'll pay on your portfolio investment entity (PIE) taxable income. If you have KiwiSaver investments, you should do an annual check to make sure you're on the correct tax rate. If your PIR is incorrect, you might find yourself over/under paying tax for the year.
Your PIR is based on your income from the last two financial years (year ended 31 March). Your KiwiSaver provider will use this rate to pay tax.
Inland Revenue has an online questionnaire that you can use to help you figure out your PIE. You can check it out here.